Letter: Beware of predatory lawsuit lenders

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The State Journal-Register

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Posted Apr. 7, 2014 at 1:01 AM

Posted Apr. 7, 2014 at 1:01 AM

There is an old adage, “If something sounds too good to be true, it probably is.”

This is especially true of lawsuit loans. All those lawsuit lenders you see advertising on TV make it sound so wonderful: Get a loan to pay bills while you are involved in a lawsuit and you only have to pay the loan back if you win your case

Lawsuit lenders charge as much as 150 percent interest, which is why many people now refer to these lenders as “lawsuit loan sharks.” They are aggressively pushing legislation (SB 3169) that would allow lawsuit lenders to continue to charge exorbitant interest rates on the loans they provide. Specifically, the lawsuit loan sharks’ bill would set the lawsuit lending industry’s nominal rates at 72 percent, which for some people could mean an annual APR of more than 100 percent.

Illinois’ lawmakers have rejected lawsuit lending legislation in the past. They can once again protect consumers by rejecting the lenders’ latest proposal and working to pass common sense, reasonable regulations that protect consumers from predatory lawsuit lenders.